Tropicana Corporation Berhad Annual Report 2017

STRATEGIC PERFORMANCE STRATEGIC PERFORMANCE SEC 1 > SEC 2 < SEC 3 • SEC 4 • SEC 5 • SEC 6 SEC 1 > SEC 2 < SEC 3 • SEC 4 • SEC 5 • SEC 6 22 23 TROPICANA CORPORATION BERHAD / Annual Report 2017 TROPICANA CORPORATION BERHAD / Annual Report 2017 MANAGEMENT DISCUSSION & ANALYSIS Dato’ Dickson Tan Yong Loong Deputy Group Chief Executive Officer MANAGEMENT DISCUSSION & ANALYSIS ‘‘ Tropicana’s strategic approach has always been centred on creating expansive living spaces and homes that fulfil the needs of its customers. ” FINANCIAL REVIEW For the year under review, the Group’s revenue increased strongly by 26.7%, registering RM1.9 billion compared to RM1.5 billion in the preceding year. This is mainly fuelled by higher revenue recognition across key projects in the Central and Northern regions. The Group’s Profit Before Tax (“PBT”) increased by 71.8% from RM168.1 million in 2016 to RM288.8 million in 2017, and net profit rose 71.3% to RM197.0 million from RM115.0 million recorded in 2016. In line with the Group’s transformation strategy, the Group’s drive to unlock the value of its landbank continued to demonstrate strong results, as its net gearing improved to 0.27x from 0.31x previously. Whilst the overall short-term prospects for the industry are expected to remain challenging, the Group believes that there will still be demand for properties in prime locations with attractive pricing. Given the strong response received from its signature developments, the Group achieved unbilled sales of RM1.52 billion as at 31 December 2017, which is expected to continue to contribute positively to the Group’s earnings in the near future. DELIVERING ON STRATEGY Tropicana’s strategic approach has always been centred on creating expansive living spaces and homes that fulfil the needs of its customers. Looking back to when the Group built the first ever resort-themed development, it was an idea that became an industry trend. This has not changed as Tropicana continues to be an industry trendsetter today. With its experience, insights and constant listening to consumer feedback, today the Group has achieved enduring success in introducing townships and integrated developments that enhance the overall well-being of its residents as well as its ability to create thriving communities. The extensive level of planning and forethought allow residents to fulfil their many needs within the same environment and thus, increasing their quality of life. Designing Value-based Service Quality Throughout 2017, customer service has been a clear focus for Tropicana as its customers are at the heart of all its actions and decisions. To create meaningful experiences for each customer, the Group continually engages with its customers as this provides Tropicana with a platform to find out what matters most to them. To support the need for more levels of contact and improve customer satisfaction, the Group introduced a dedicated Customer Care department that provides effective and efficient services on matters pertaining to the various developments’ units, houses as well as general enquiries. The staff are trained to be efficient, effective, armed with the right knowledge and able to provide professional service that allow customers to make informed decisions. Cheria Residences in Tropicana Aman offers spacious interiors with built-in innovative, smart technology For the financial year (“FY”) 2017, Tropicana made significant strides in strengthening its position in the property development industry as the Group reinforced its market position and introduced new products to Malaysians from all walks of life. The Malaysian economy continued to experience robust growth in 2017 as the Gross Domestic Product (“GDP”) grew between 5.5 % and 6.0%, the most in three years supported by healthy domestic demand and strong exports. Despite the rising economic confidence, the property sector remained challenging given the imbalance in demand and supply as well as the tightened lending environment. Though the industry experienced lower rate of transactions, this sector was adjusting well to the changing economic environment and consumer spending habits. Given Tropicana’s long-standing experience in the property industry, the Group is cognisant of the cyclical nature of the property landscape and have already established plans for the long-term. Through the transformation strategy, Tropicana has made good progress in strengthening its balance sheet despite market conditions. The Group has seen improvement in its Compound Annual Growth Rate (“CAGR”) of 7.22% and 8.63% on shareholders’ funds and total assets between 2013 and 2017 while its net gearing ratio reduced from 0.55x in 2013 to 0.27x in 2017 following the Group’s drive to unlock the value of its landbank and non-core assets. The progress made thus far demonstrates the high level of foresight and resilience the Group has when it comes to designing sustainable homes that meet the current and future needs of customers, driving performance as well as its focus on delivering long-term shareholder value. THROUGH THE TRANSFORMATION STRATEGY, TROPICANA HAS MADE GOOD PROGRESS IN STRENGTHENING ITS BALANCE SHEET DESPITE MARKET CONDITIONS. Ridgefield Residences within the award-winning Tropicana Heights offers a wholesome lifestyle within a green environment TROPICANA CORPORATION BERHAD Annual Report 2017 ABOUT TROPICANA STRATEGIC PERFORMANCE LEADERSHIP SUSTAINABILITY GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION